Apparently, Apple has been meeting with cable TV companies
recently pitching a new idea:

A cable set-top box that is built or at least powered by
Apple technology.

This would presumably either be sold directly, via Apple stores,
and replace cable customers' current cable boxes. Or it would be
bought by the cable companies and rented to subscribers, the same
way cable companies rent today's set-top boxes.

The advantages to this sort of deal for Apple are obvious:

Immediate access to live TV content that consumers are
already paying for (and that, otherwise, Apple would
have to license directly from networks)

A clever way of getting into the living room and TV
ecosystem, without forcing consumers to change their
TV-watching habits or TV providers or buy another set-top
box

The same sort of "carrier subsidy" arrangement that has
helped sell so many iPhones

The seamless convergence of today's TV with the future
of TV, which is streaming and stored media delivered through
iTunes, the Internet, etc.

It would set Apple up to gradually gain more leverage
over the cable companies--until the day when Apple has enough
households worldwide that it can go direct to the networks and
render the cable companies dumb pipes.

All that would be excellent for Apple. And the technology could
be incorporated into the Apple TV hardware (the "sheet of glass")
and help Apple sell millions more TVs.

Of course, the cable companies aren't stupid.

They know exactly what Apple wants to do to them.

And although there are advantages to this arrangement for the
cable companies, too--namely, they could insert themselves into
the "new TV" ecosystem from which they are currently excluded
(content delivered over the Internet), and perhaps get a cut of
sales--they also might be helping bring about their own demise as
the gateway to TV.

(The cable companies have a viable future, regardless of what
happens to pay TV, because they're now the country's primary
Internet access provider. Consumers need broadband access
desperately--it has become as important to daily life as
electricity--and cable companies can make a nice living off that
alone. And they can make an especially nice living off it if,
say, they were to share some of the revenue Apple generates from
iTunes and TV sales).

In any event, there's a lot at stake for both sides here, so
these will be tense negotiations.

But it might be that there's enough "win-win" potential that
deals can get done.

And there's another thing to think about here.

Don't forget that Google just bought a company that
makes set-top boxes: Motorola.

Don't forget that Google has its own designs on the TV business
(Google TV).